Is Tesla Gap Insurance Worth It?

Tesla’s Guaranteed Auto Protection (GAP) is similar to what you’ll get from an insurance provider—because Tesla is also an insurance provider.
Written by Sarah Gray
Reviewed by Brittni Brinn
GAP insurance
, or Guaranteed Auto Protection is optional insurance you can purchase to cover the gap between what you still owe on a new vehicle and its actual cash value. Buying gap insurance from a dealership is often more expensive than adding it to your insurance policy, but that may not be the case with Tesla, because Tesla isn’t just a car manufacturer anymore—they’re in the auto insurance game, too.
For the most part, buying a Tesla isn’t like buying other cars. But one question remains the same—should you buy gap insurance from the manufacturer, or should you opt to get it through your insurance provider? With Tesla, you may find they’re one and the same since Tesla not only builds and sells cars but they also sell
car insurance
To help you decide if getting gap coverage through Tesla insurance is the right move for you, we’ve created this guide.

How does Tesla’s GAP work?

Tesla’s gap insurance works by paying the difference between what you owe and what your car is worth if it’s stolen or becomes totaled. Generally speaking, gap insurance is optional, but if you lease a Tesla, it’s automatically included in your financing.
Unfortunately, finding additional information about Tesla’s Gap coverage is challenging—and by challenging, we mean nearly impossible. Let’s start with what we do know.
If your new Tesla is stolen or is totaled, Tesla gap coverage will waive or pay the difference between your insurance payout and what you still owe on your lease or loan. That’s basically all we know for sure.
The biggest question we’d like to see answered is this: does Tesla offer gap coverage in states where it doesn’t sell insurance? Currently, Tesla insurance is only available in twelve states, but can you still buy gap coverage through Tesla elsewhere in America—and if so, is it still priced as an insurance product, or does it mimic the often more expensive pricing of manufacturers’ gap policies?
We’d love to answer all these questions. Unfortunately, none of these answers are available anywhere in Tesla’s online information. They do offer a phone number for questions and concerns (1-844-34-TESLA).
If you end up calling this number, however, be aware that the wait times and pre-recorded messages may be frustrating. One of those messages suggests signing into your Tesla account online—however, if you don’t have an existing insurance policy with Tesla, then this advice isn’t very useful. Even though Tesla insurance business hours are Monday to Friday 6:00 am to 5:00 pm and Saturday 9:00 am to 2:00 pm (PST), there is no guarantee that an agent will be available to speak with you—no wonder reviews of Tesla insurance services all list customer service issues!
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How much does Tesla GAP cost?

That’s an excellent question, and one we, unfortunately, could not get an official answer to. We can speculate, though.
Like most gap policies, the cost likely will be affected by the value of your vehicle. We would expect gap coverage on a
Model X
, for example, to be more expensive than that for a
Model 3
One of Tesla’s goals in providing insurance is to create an insurance product that looks at your individual driving behaviors rather than statistics to calculate your premiums. Rather than looking at things like your age, credit score, and marital status, Tesla uses telematics to track your driving behaviors and create a “safety score.” The more safely you drive, the cheaper your insurance.
That’s great—but how or whether that affects gap coverage pricing is anyone’s guess.

Tesla GAP vs. alternative gap insurance

Again, working on assumptions, since Tesla gap coverage is offered through Tesla insurance, one would assume it is priced and behaves similarly to other gap insurance policies purchased through other insurers. That is, at least in the
12 states
where Tesla is licensed to sell insurance.
The bottom Line For those with the time and patience, it may be worth it to find out more about Tesla’s gap coverage. For the rest of us, purchasing a gap insurance policy through your insurance provider is most likely your best option.

Do you need gap insurance? 

In most cases, gap insurance can offer excellent financial protection you wouldn’t otherwise have. But here are some instances in which that protection may be unnecessary.
If you plan to
lease a Tesla
, you’ll be required to purchase gap coverage, so that question is already answered for you. However, gap coverage isn’t required on new Tesla purchases—but it’s likely worth the extra cost.
Granted, Teslas don’t tend to depreciate as quickly as other electric vehicles (EVs), but that doesn’t mean they don’t depreciate at all. If you purchase a
Model S
for $96,630, it will depreciate by as much as 15% in the first few years of ownership. Even if you put 10% down, you’ll still be looking at a loan that’s upside down by at least a few thousand dollars—gap insurance will cover that in the event of a total loss.
On the other hand, if you put down more than 20% on your purchase, or you selected a short loan term—say three years—then the added expense of gap coverage probably isn’t worth it. Similarly, if you’re purchasing a used Tesla, you likely won’t require gap coverage.

How to cancel Tesla gap insurance

Another excellent question, which we’d have the answer for if an agent ever answered or returned our call—but we digress.
If Tesla sells their gap coverage as an insurance product, you should be able to cancel it at any time. However, if it’s sold the way most manufacturers sell gap insurance, then you’ll likely have a set period of time during which you can cancel the policy and receive a full refund. Often that period is 30 days.

What is the Tesla gap insurance refund process?

Again, we’d assume it’s similar to many manufacturer’s refund processes—if Tesla’s gap coverage is sold as a lump-sum product. In this case, it would likely be fully refundable if canceled within 30 days of purchase. A full or partial refund would also be likely if you return your leased Tesla or sell the car.
saved me $80 a month! I have a Tesla Model Y and really wanted to lower my rates. And they did! I really recommend you give this a shot!” —Nick M.
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